(The Signing of the Treaty of Ghent by Amedee Forestier)
The headline is a bit truncated. Although the treaty which ended the war between the United States and the United Kingdom was signed on Christmas Eve of 1814, it did not come into force until it was ratified by the United States Senate and the Prince Regent on February 16 and December 27, respectively. In fact, one of the largest battles of the war--the Battle of New Orleans--was fought on January 8, after the treaty was signed.
Britain provoked the United States into war by kidnapping its sailors and capturing its ships on the high seas. The United States had gone to war with the official aims of ending naval impressment, British piracy, and obtaining compensation for its robbed merchantmen. Many Americans also hoped to conquer part or all of Canada. At this point, early in the war, the British simply wished to retain its territory in Canada.
The United States obtained none of its war aims, but the British obtained theirs.
Later in the war, after the British had defeated Napoleon and brought their European forces to bear in North America, they wanted to conquer eastern Maine, Vermont, northern New York, the American Northwest north of the Greenville Treaty line (to become an Indian protectorate), return the Louisiana territory to Spain, and end American fishing rights off the Grand Banks. At this point, late in the war, the United States simply wished to retain its territory and fishing rights.
The British obtained none of their war aims, but the Americans obtained theirs.
So when the ink dried on the text of the Treaty of Ghent, the terms were status quo ante bellum--a return to the conditions prior to the war.
It took quite a bit of work for the negotiators to arrive at that point, though. When they first met in August of 1814, the British thought they were in a strong position--especially after word reached Ghent that the British had burned Washington, D.C.. The Americans nonetheless clung to their goal of status quo ante bellum. After their twin victories at Baltimore and Plattsburgh, they had reason to.
So the British switched to uti possidetis--the legal principle of actual, physical possession at the end of a war. Wherever American and British troops were, they would set the borders. As the British were then occupying eastern Maine and part of the American northwest, this would have been to their advantage (though the Americans held Fort Malden in what is now Ontario).
It was ultimately the Duke of Wellington who broke the deadlock. The famed British general advised the British negotiators that they should accept status quo ante bellum, which they then did. After some haggling about the language, the negotiators signed a treaty on Christmas Eve and returned home. The war was over--at least on paper.